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Budget Statement 2021 (Continued)

Tuesday, 13 October 2020

Dáil Éireann Debate
Vol. 999 No. 2

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  5 o’clock

(Speaker Continuing)

[Deputy Cian O'Callaghan: Information on Cian O'Callaghan Zoom on Cian O'Callaghan] Rents have skyrocketed. The average rent in Dublin is now more than €2,000 a month, which puts a great strain on families, especially those working in lower-paid jobs. The very people who have kept this country running, kept our supermarket shelves stacked and supplied, cleaned our hospitals and looked after our elderly as care assistants continue to be put under great pressure with exorbitant rents. Rents cost more than mortgage repayments but many renters are locked out of buying a home. State payments and subsidies to private landlords to support low-income renters in insecure tenancies are fast approaching the €1 billion mark. These subsidies, which inflate rent levels, would be much better invested in an affordable rental model. This budget continues the failed policy of putting more and more money into subsidising high rents and private landlords. It makes paltry provision for cost-rental housing and will only fund 400 cost-rental homes. We need to show ambition and we need cost-rental housing to be delivered on scale.

Housing that is affordable to buy or rent remains beyond reach for many families. New homes provided by private developers are sold at approximately twice the build cost with land costs, professional fees, levies, taxes, developers' margins and profits accounting for the rest of the price. Construction costs in Ireland are higher than in other countries such as France and Germany. In the Netherlands, construction costs are 18% lower than in Ireland.

Mortgage costs in Ireland are also considerably higher than in other European countries. A family with a mortgage of €300,000 in Ireland will pay €80,000 more in interest than a family with a similar mortgage in Germany.

On top of this, only approximately 16,000 homes will be built this year when we need at least 35,000. The model of relying on private developers and speculative developers is broken. It does not work and it is abundantly clear that we need a change in direction. Instead of introducing a new model of direct-build affordable housing, this budget will put millions of euro in subsidies into the hands of private developers to maintain high prices through the shared equity scheme and other initiatives.

The shortage of social housing has caused havoc for people who are unable to afford increasing rents in the private rental sector and has led to unprecedented numbers of people becoming homeless. We are way off course to meet the Government's target of building 8,000 social homes this year. Less than 10% of the target number had been completed in the first half of the year. At the end of each calendar year, as the Government fails to meet its build targets, we see a large number of turnkey acquisitions for which the Government pays developers over the odds.

Likewise, the Government is paying over the odds for Part V social housing units. In one extreme example, developers sought to sell just 14 apartments to a local authority for more than €9 million. When it comes to providing social housing, long-term leasing is another win-win for developers with the State effectively paying the full cost for homes over a 25-year period while the developer retains full ownership. We need investment in social housing that is good value for money in the long term and we need to end the subsidies provided to developers through long-term leasing and turnkey acquisitions. This budget provides for fewer than 600 additional new social homes beyond those already announced in Rebuilding Ireland. This shows a complete lack of ambition.

We need a budget that works for people and families and which will give hope to those who are struggling to pay rent and who are living in fear of eviction and becoming homeless. We need a budget that will make housing affordable to buy and rent. Instead, we have today seen a budget with which developers will be happy. Developers asked and lobbied for more subsidies to support their model of housebuilding and land speculation and that is exactly what they got. Subsidies that go to private developers through shared equity schemes or grants for first-time buyers push prices upwards and keep house prices at levels that are out of reach and unaffordable for many, as my colleague, Deputy Shortall, has said. The approach that needs to be taken is one that drives down the cost of housing to make it affordable by tackling land costs and land speculation, cutting out developers' fees, profits and margins, and providing an affordable alternative to the private speculative model of housing.

There is no shortage of available funds as they can be borrowed at historically low interest rates to fund the construction of housing that is affordable to buy and rent. It is clear from this budget that there is, however, a shortage of political will when it comes to breaking the costly and expensive model of subsidising private developers. The Social Democrats believe that now is the time for an ambitious programme of public housing so that everybody can have a place to call home.

Deputy Richard Boyd Barrett: Information on Richard Boyd Barrett Zoom on Richard Boyd Barrett Faced with the really dire crisis produced by Covid-19, which is a health crisis, an economic crisis and a social crisis, we needed a budget that would support decisive action to defeat the threat of Covid-19 to public health and to support the workers, livelihoods and families most severely impacted as a result of the economic fallout of Covid-19. This budget has failed on both counts. The headline figures sound great but as soon as one looks into the detail it becomes clear that, despite significant increases in expenditure, the budget does not actually do what is necessary to deal with the threat of Covid-19.

  The decision not to restore the pandemic unemployment payment, PUP, and the wage subsidy scheme, which the Government has cut, is nothing short of a disgrace. It is a very dangerous mistake as infection rates rise and as tens or hundreds of thousands of people once again face potentially losing their employment and jobs if further restrictions are imposed. It seriously undermines the collective social solidarity that we need to deal with the threat of Covid-19. It was bad enough that people had to endure months of hardship, lost income and unemployment as a result of public health restrictions on a payment of €350, but to expect those whose particular jobs mean that their incomes are on the floor or their employment has ceased altogether, to continue through the crisis, along with others who may join them as a result of further health restrictions, in an even worse financial position is unacceptable and disgraceful. How are people supposed to pay rent, mortgage payments or bills if their income is slashed or their opportunities for employment massively reduced?

  I have mentioned people in particular sectors, such as taxi drivers, musicians, those who work in the arts and events sector, ad nauseam. Such people who were getting the PUP, which has now been cut, have no prospect of returning to work at any time in the future or of their sectors fully recovering as long as the pandemic is with us. They will have to continue on while getting reduced payments.

  While there is talk of an income subsidy, which such people may be able to receive while earning other income, there is a problem. The first is that people are on different levels of payment. Some are on €200, others are on €250 and others are on €300. There will be a cap of €120 on how much such people can earn in a week and it is not clear whether those who reach that cap will lose their entire payment. In any event, there is virtually no work out there and these people will actually have to survive on these reduced payments. On top of that, they will now have to pay additional vehicle registration tax if their vehicles are old, additional car tax and additional fuel costs as a result of the decision to increase the carbon tax. These are all regressive taxes which further increase the economic financial pressure on people who have already had their incomes and employment devastated. I put it to the Government that it is cruel and unfair to do that to the people who have been hardest hit by the pandemic.

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